updated 4/26/2005 3:55:06 AM ET 2005-04-26T07:55:06

Paul Volcker, who heads a probe into corruption allegations in the U.N. oil-for-food program, denied in a new interview that there was any conflict of interest over his link to a U.N. official being questioned in the probe.

Volcker, former head of the U.S. Federal Reserve, told Fox News in comments to be aired Tuesday that he had an acquaintance with Maurice Strong “as many people do over the years.” Strong is U.N. Secretary-General Kofi Annan’s envoy for North Korea, but has stepped aside while Volcker’s commission checks for his possible ties to oil-for-food. He denies any link.

Both U.N. program, probe under scrutiny
Volcker’s Independent Inquiry Committee is investigating allegations of widespread fraud in the $64 billion program, which ran from 1996-2003 and was meant to help ordinary Iraqis suffering under U.N. sanctions.

While controversy swirls around the program, Volcker’s committee has come under scrutiny. Last week, two senior investigators resigned because they believed that report was too soft on Annan.

Volcker said there was no agenda to spare Annan.

“We are not meant to be soft or hard — we are out to get the facts and I’ve said from the beginning our responsibility is to follow the facts wherever they lead,” Volcker told Fox, which provided a transcript of the interview to The Associated Press Monday evening.

Volcker’s connection to Strong has also raised questions.

Volcker once served on the advisory board of Power Corp. of Canada, a company Strong had led many years before. Strong was Power Corp. chief from 1964-66, while Volcker was on the board in 1988, long after Strong ceased to be associated with the company, Volcker told Fox.

‘A ludicrous stretch’
Volcker said neither his acquaintance with Strong nor his ties to Power Corp. posed conflicts of interest.

“It’s a ludicrous stretch,” Volcker told Fox. “There is no, absolutely no conflict of interest.”

Strong, a prominent Canadian businessman, has not been implicated in the oil-for-food scandal himself. But he has been linked to the program through South Korean businessman Tongsun Park, who has been indicted in U.S. federal court for alleged involvement in the scandal.

Strong has acknowledged that Park once invested in a company he was associated with, but denies any link to oil-for-food. He later said the Volcker committee was checking his possible connection to the program.

Volcker’s committee has released two reports so far on abuses in oil-for-food. The latest faulted Annan’s management of the program, but cleared him of interfering in the awarding of a $10 million-a-year U.N. contract to the Swiss employer of his son, Kojo Annan.

Kofi Annan later said he accepted the criticism but claimed the report exonerated him — though Volcker had made clear when he unveiled the report that the findings against the secretary-general were “adverse.”

Volcker repeated to Fox that Annan was not exonerated.

Saddam’s government had authority to decide who would have the right to purchase oil under the program and it is believed to have extracted kickbacks ranging from an estimated $9 billion to $21 billion.

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